Trading Forex Coach

Hi everyone, it's Friday and the last day of the second week of 2023, a year of risks and opportunities. As a result, we anticipate a very volatile year and should trade with caution when using a very easy stop-hunt S/L. By the way, as I mentioned yesterday, the CPI news suggests that the Fed is on the right track when it comes to aggressive rate hikes in 2022 to taper inflation with the risk of dampening the economy. However, there is a chance that the Fed can make the soft landing a reality, albeit with a lot of luck, because the overall set of data is not pointing in the wrong direction. Between November and December, the price of energy is once again helping to lower headline CPI figures, and it's the second consecutive month. However, this kind of factor is not always stable as it's related to many unstable things like China post-Covid, geopolitical conflicts, the weather, etc. So it's good today, but I'm not sure it's good next time. If we exclude energy, the CPI increased by 0.3% in December. Besides, the service prices are still up and it's very hard to change when the service costs are up. When you raise the price of your service, it's difficult to say that we'll cut our service costs starting next month, even if the core CPI is lower. No one does that. If the rent is up, then it stays up; be realistic. To summarize, this piece of inflation points in the right direction for the Fed and supports the Fed's decision to keep raising interest rates as planned. However, things have already been discounted in price from last year, so the market expects the Fed to reverse rate hikes sooner if it can achieve the so-called soft landing phase. However, inflation is an unstable thing and it's still too soon to revert anything but to keep doing as planned. So the chance now is another 0.25% next month and maybe more in the months ahead. This will impact the financial market conditions regarding lending and such then it impacts the housing, and credit market more. It's too soon to call for bottoms at this time, however, the impulse is predictable and may continue to some extend for days more before the rate hike ahead. Happy trading!

Hi everyone, I'm too busy for the comments today regarding the inflation number but will do it by tomorrow. Anyway, it's the expected inflation number (as forecast) and if there are no surprises then the previous short-term trend is still intact as mentioned last few posts. It may take days or weeks to find reasons to change.

Hi everyone. It's Tuesday, and the market is quiet, or rather, quiet before the storm. The perfect storm is coming on Thursday when the CPI will be released, and it's one of the most important pieces of data that the market is looking for to trade in both the short and long term. Where is the USD now? While the low of 103 attracts many experienced eyes, it is only after the CPI news that it is determined whether it will break or hold. For the time being, I believe it is safe, if not possible, to engage in some intraday counter trading to shave some pips before the real fluctuation during the news. The market is like that, and it's part of our general strategy to decide technical levels and combine them with speculative data to decide whether to go bullish or bearish over a variety of timeframes. This means even a purely technical trader, regardless of timeframe, still benefits from information regarding other timeframes, and it is invaluable data to set the proper range to trade for his/her timeframe with confidence and a realistic approach. I've also seen many people focus intensely on selecting the perfect entry, only to exit with a loss after a while because they can't find logical pulses when the price fluctuates. All eyes are on the CPI data and what it will reveal. The whole market is looking for a low CPI number to confirm we are on the right path, and if so, all risky assets will continue to advance (at least till the next Fed meeting). So, no surprises if risky assets are up if we have "good" data. However, as the market is so skewed toward that option for now, it would be crucial if things were different, and that's exactly how one needs to think about risk and reward as the short squeeze for the USD dollar would be much stronger than the "good" CPI. Well, this is just a warm-up for the big news to come, and I am just trying to remove some guesswork for a lot of people. Happy trading.

Hi everyone, It's Friday, the last day of the first week of the year 2023. We have non-farm today, and it's adding 223K instead of 200K as per the market's forecast. This means the labor market is still good even though it's declining from +263K to +256K and now +223K. It's still high "on average.". The wave pressures are a bit off, and it's a good news for the Fed in terms of inflation, which would have a better chance despite the tight labor market. The unemployment rate unexpectedly fell to 3.5% in December from 3.7% in November, indicating a tight labor market and full employment. Except for the earnings decline mentioned above, everything appears to be in order for the new year, but the Fed faces a headache in dealing with inflation. So, we are having a small party from the risk side due to the chance that the Fed may have a soft landing (increase from what I mentioned yesterday) with controlled inflation and not go into recession with high unemployment and negative GDP. That's behind today's movement in price when the USD is down and securities are up again. It also increases the likelihood that the Fed will raise rates by only 0.25% on March 1st, dampening recent USD gains. That's what the market wants to see, and that's how the Fed hopes to act in the short term. If this short-term is maintained over the next few days or weeks, it may present you with an opportunity in some way. Just a few hints to get you thinking. Happy trading!

Hi everyone! Happy New Year 2023 - A year of both risks and opportunities! I will come back to my base from Europe next week, however, as promised, it's time to grasp some ideas for the new year. This should be long as it covers a lot of information, but I tried to make it short with a few important facts and commentaries. There is no such thing as a fixed prediction for the entire year because events change and we need to revive the scenarios, just as the Fed did throughout the year, and I am no exception. I'd just like to reiterate that the purpose of my market wrap here is not to trade for you or provide daily signals, but to tell the market stories in an easy way, as we always try to find the passion in what we're doing regardless of whether you trade by fundamentals or technical. It's always good to know the true stories behind every movement, and it would benefit your knowledge (and wealth) in the long run to avoid making stupid life decisions that you'd later regret. So, what's in 2023? First, the Fed's tightening policy in 2022 will obviously have a lot of impacts in 2023. If you noticed the meeting minutes yesterday, then you could see the aggressiveness is not yet over. There is a hint that the Fed will continue to focus on combating inflation even though it may impact the labor market and the economy in the short term. So, the inflation development and all of the indicators around it would continue to be our focus until things changed, at least for the first half of 2023. The entire market, including the US stock market, does not fully price in the risk of inflation, even after it has peaked but continues to remain high for a longer period of time. So, in that case, if it proves to be right in Q1 and Q2, then we would experience a fully priced-in price for this risk, which means another bigger dip for the stock market. If this is the case, this is an opportunity for me to accumulate for a multi-year strategy. Remember that we would have a rotation in voting members of the FOMC, and the tone and voice would be more dovish as expected, however, the path of monetary policy still remains the same. In short, the meeting minutes provided the market with a short-term opportunity to correct things that had been quite extended since November. So, all eyes are on the December CPI data, and this would hint at a lot of things ahead about picking a side for H2/2023 to be the theme to trade. In short, while 2023 is very easy to trade from a longer term perspective, it's very sideways and choppy during the first half of the year. Longer-term trades include investing in risky assets such as stocks, cryptocurrencies, and specific currencies at the first signs of a soft landing (30%-35%). The difficult part is trading short-term (as most traders do; I'm a mixed trader), while we have to surf through the choppy waves with all the news and data (no worries, we have daily wraps for that :) ). Because a recession is likely (65-70%), low-quality bonds are not preferred in the bond market. Government bonds would be in demand during this period, but choose the shorter-term tenor rather than the longer-term because we never know how inflation will pan out. A longer-term bond with this rate is not worth it for "longer" purposes as the real return is bad. If possible, pick things with inflation-linked features, including buying life insurance. Don't you see inflation may have a chance not coming back to the level that we used to know? That's all for now; see you all in the next post.

Hi everyone. The market is nearing the end of the year. I'd like to write a market wrap-up article for you guys at the start of the new year, 2023, to see where we can position ourselves for the new market stage and higher terminal rates in 2023. It's not ideal to trade in a low liquidity market between Christmas and New Year's Eve, or for a few days afterwards, because the cost of transactions would be higher for larger positions. Just read the COT market report for positions from last week, and EUR is still showing a lot of newly added positions, while Treasury is net short with high volume since the Fed's decision last week. It will be interesting to see if there is any pivotal unwinding of all those positions after the Fed decision. The data is available this week, so there is no rush to fill any positions during this time. Just a head-up on what we are waiting. Happy holidays ahead!

Hi everyone. It's Thursday, and the Fed has raised interest rates by 0.5%, as expected. The interesting thing is that the Fed lowered and raised expectations of the terminal rate within a session, and that comes through in the price action of the USD being lower after the headlines but backward during the speech. In short, the Fed projected the terminal rate to be in line with the next 0.75% rate hike, and there is a chance that we can divide it into three 0.25% rate hikes in 2023. The second thing to take away is that the rate will remain high until 2024. I expect a drop of 1% in Q1 2024, and then we are going to come back to "normal" during 2024. It's time for risky assets to rise. Obviously, risky assets fell after the news because they expected a quicker dovish stance, not till 2024. The Fed's decision is heavily influenced by inflation, which may remain stubborn for some time, as well as unemployment. There are some shifts in Fed projections, but I will not go into details about them lest they confuse us more. Now we can refer back to my last post about price movement behaviors. Risky assets were up in speculation with nice CPI headlines and a dovish stance from the Fed in 2024, however, things are not like what most people always expected, and after the news, risky assets sold off (crypto, stocks, and commodities as there were more concerns about growth). Do you know why commodities are down, not because the USD is up (actually, it's sideways up and down)? They are down due to the prospects for growth and the impact on demand projections. You can check for AUD drops compared to EUR or GBP. The USD got sold off at first after the news, as I mentioned last time, and after the news, just a few days later, people will forget about this USD sale and find ways to buy it back, Why? The recession is coming. Most of the time, the market operates as a forward pricing machine. Happy trading!

Hi everyone, I've been in Poland for a week now, and it's very cold, with snow everywhere. My kids are both sick, and my daughter had to take antibiotics today as she got infections due to the cold weather. It's an experience to keep them warmer, especially when we move from a tropical country. By the way, I'm not working at all (only a few short sessions per week to keep the newsletter updated on key events) during this time, but I'm busy with daily activities like visiting family and friends. My experiences have always told me that I should take the month of December off unless something is extremely obvious, such as what I updated last week. I hoped some of you guys would have the courage to buy on the dip. The CPI and the USD were both at their peaks, and we only traded within the range when all markets were priced for tomorrow's pivotal 0.5% rate hike. So the USD is being priced down, and risky things went up, especially crypto. On the other hand, movements in risky assets should only be used for pivotal events such as tomorrow. As the recession approaches, the themes remain unchanged, and the USD may be back or at least trading in a better range above 100. USD may welcome a wave of sell-offs following Fed news tomorrow, but people will forget about it in a few days and focus on an ECB rate hike, which I believe will be only 0.5% this December, and not-so-great financial reporting ahead. Yeah, it's not nice for risky assets, and there's also a chance to sell on a rally using this Fed expectation. So I believe you know what to do next. Happy trading!

Hi everyone. It's Friday, and NFP is "better" than expected. Better means better for the entire market, but the Fed does not think so. The USD is rising on speculation that there is a chance for a higher rate hike than the current "default" 0.5%. However, I don't think there are any chances for something different in December with a rate hike of 0.5% and the USD peak in place. The current move up in the USD is just a short squeeze, but it does not change any trends here. The majority of the movement is toward their potential target, and the news is simply assisting in realizing the profit accumulated over the course of the week, such as in gold, EUR, GBP, stocks, and so on. So, in summary, what do we look for at the start of a new week? Buying on the dip or waiting for a breakout from a previous peak to blend into a new position. It's very basic, simple, but most retailers cannot do it as they change their opinions on every single price action from the market :) I'm packing my things for my long holiday trip, so I will keep you updated on the journey when there are interesting events. Again, the purpose of those notes is to change your perspective on trading to make it more engaging by exposing the real things behind the price movement and finding joy and happiness along the way. Happy trading!

This is the post for lending you an idea to position on some assets for the next cycle. Just try to digest more on what I wrote. Don't just always look at the chart and find the levels or indicators to trade. Cheers!

Hi everyone. It's Thursday and many data to digest including PCE, PMI and personal incomes. PCE printed even a bit lower than expected, which was actually also expected, and it does not change the perspective of current Fed policy. The current terminal fed funds rate is 4.75%, and the futures market is pricing slightly higher and will not change with this PCE number. PMI is printed at 49, meaning a warning sign of contraction. Actually, this is also expected. To me, the most important data today is not the "red label" data but just the "yellow label"—personal incomes. The headlines printed an increase, and this causes more troubles than it helps. As I reminded you many times, we are facing a problem with consumption fueled by abundant employment and higher personal incomes. This helps increase demand and keep inflation stable and high. The Fed is trying to tame the labor market to disrupt its source of income and reduce demand. However, with nominal personal income growth of 0.7% m/n, we are still facing consumption issues, which the Fed will not like. Besides, the personal savings rate, which I mentioned once before, continues to fall to 2.3%, and this shows that people are using their savings to fund spending more and more. That's the current picture of data today. Powell had a market-saving speech prepared to tell the crowd what they wanted to hear: a higher likelihood of a 0.5% rate hike in December. Powell just dumped Bullard's hawkish comments from the beginning of this week. USD made a high at 107.20 before dumping after the speech. If you hold a winning position over news like this, remember to tighten the exit level. as I mentioned yesterday, no one will know about such news, and we have to go through it to the fullest extent this week. Volatility is much higher than expected from yesterday until tomorrow with NFP. So, USD finished the correction and is on its main trend of going down. The level of 103 is a welcome place for the dollar at the moment, as long as NFP does not surprise. Gold and the yen both rose to 1800 yen. This reminded me of the recommendations to buy gold and yen in some posts here a couple of weeks ago. By the way, December also comes, and like usual, I will have a long holiday next week. I'll be back in Europe until the second week of Jan for a family visit. I will be on and off at the channel depending on the news or events that are worth a brief. During this low liquidity season, which lasts from the second week of December to the first week of January, I would usually limit my trading and viewing. I'll also suspend my newsletter for about a month. You guys also need a rest and should size your trades wisely during this time. Happy Trading!

Hi everyone. It's Wednesday, and the USD is essentially unchanged from yesterday, despite some choppy movement today that, as I predicted, was enough to knock people out of positions. DXY did not bypass 106.80 yesterday and gapped down when the market opened. It only recovered to 106.30 in the last three hours. It has now passed the resistance level of 106.80 and will continue to rise. Remember that we have Powell's speech in just a couple of hours. GDP printed well today, but stock is down after that. WTH? :) Technically, 3910 is the support for US500 and all eyes are on that. For the rest of the pairs, just trade inversely with USD if you can catch the USD trend, and then the rest is just easy at this moment (at least for a couple of days). Nobody knows how the market will react after digesting all of the news for the next few days, but volatility should be much lower from today until the end of the week. So good luck to us after Powell's time. However, last but not least, I am seeing a chance that the US will manage to delay the recession as momentum from data on employment and GDP builds. It's good news, but this will cause more volatility in Q4 as people will shift their positioning a bit as things will not come quickly. So I'm all eyes for the changes in views ahead if data shows something differently. Happy trading!

Hi everyone! It's Tuesday and market more or less sideways to me. We're going to have a lot of big news this week, culminating with the NFP, so mentally prepare for volatility to rise starting tomorrow. I have deadline things to do tomorrow, so I'm going to make this note short and to the point: the USD was up from yesterday from 105.xx to 106.80. All eyes are on the 106.80 level, as this is short term resistance. However, I saw stock continue to drop, and if this can relate to the theme I shared yesterday, then you can trade well today with that theme regarding any assets. The USD ran a bit tricky and choppy during the intraday, so if you are a fan of "price action," you've got to get killed sometimes during these choppy days if there are no fundamental things behind. Remember to keep an eye out for the mentioned USD resistance, and if it breaks, it's fine; less choppy trading lies ahead. If it fails, we'll have to go through all of the choppy and sideways times again, which I'm sure would knock most retailers off their feet. The likelihood of a rate hike to 0.75% in the near future is at 30% at this moment, up from 24% last week, but not enough to create a real impact on the USD and yields until more surprising news comes out. In terms of U.S. housing prices and supply and demand, I believe that the housing market will continue to fall gently until H1 2023; however, I do not expect a moderate drop as many people expected because supply will be reduced while demand will remain high. So a light correction is good, and now is the time to buy during H1 2023 if you really want. Happy trading!

Hi everyone! It's Monday, and the market is positioning with risk aversion while USD and JPY were up at first, which is in line with the Chinese protest event. However, the EUR is rising as a result of the ECB's hawkish outlook. All of this pushed the USD lower while the EUR barely touched 1.05 before correcting itself. People are easily swayed in these situations, whether the trend toward risky assets is on or off today and in the coming days. I myself think USD is sketched to the downside quite a bit, even though I wanted it to drop quickly to 103 so I could have a nice spot to go long for a nice correction after that. However, the 105.xx levels are not so bad to start accumulating for a correction back to the 109 level. I believe the USD has peaked, but I also believe there is room for a surprise USD boost from inflation data, so we can always exit with a profit if we accumulate from the 103–105 level. Furthermore, the stock market is heavy today as a result of the Chinese protest, and the same is true for cryptocurrency. I hope you can feel the theme. Happy trading!

Hi everyone, Thursday is Thanksgiving Day. The market expected the FOMC minutes from yesterday, as there was no surprise with any hawkishness. The USD fell slightly as traders predicted a 0.5% rate hike in December. Some professionals expected a better GDP this quarter for the U.S. due to retail and new home sales. Some adjusted the GDP forecast, and it's good but weird. I also had an article in the company's blog about the chance of a soft landing this time. It needs a lot of luck for this soft landing, as the unemployment rate is not really under control. So all eyes are on the NFP next week, which is going to impact the stock market, which is a bit upbeat for now. From the data that I collected, there would be a high chance of a 0.5% rate hike in December and three more rate hikes in H1 2023 with 0.25% each. That's the latest speculation up to now, but things may change if we have surprising data ahead. By the way, enjoy your weekend until I return on Monday.

Hi everyone, It's Wednesday, and new home sales surprised the market by rising to 7.5% in October. Even though it only contributes a small portion to GDP counting, it's still a surprise during this time of high interest rates on mortgage loans. This is going along with a high retail rate that increased by 1.3% in October, as published last week. However, as I have mentioned in previous posts, people are using credit cards to finance their consumption in order to keep up with the higher prices that corporations attempt to pass on to end-customers. This leads to a lower rate of savings for households and is bad for the economy later. The other thing that can explain this situation is that the accumulation of savings was high during COVID, and when things got looser, people just bought anything that they could afford to drain all their savings. So, again, I still believe the numbers are just lagging behind reality, and we are coming into shopping season as well, so things would keep like this for a while more despite the high interest rate. My role here is to make sense of the market movement and data so that we can see the beautiful pattern behind trading. Except for BTC, which found support around 15500 and backed off a bit with other risky assets, all other short-term views remain unchanged, while USD made a correction back to 106.80 today and bounced back to 107.20 before dropping, as the Flash PMI service revealed. So my suspicious about USD correction to level of 108 and if better 109 is correct and it shows by making a drop back to 106.26 now. However, all eyes are waiting for Fed minutes for a couple of hours more, and things may go sideways then if any hawkishness is detected in the community after the news. Gold is also finding support around 1728 and trading well above this level. Oil dropped back to retest the 76.30 level, so there is a chance of bouncing back and going sideways; unless it really breaks this level and retests, then we're going to have another short. I'm flat on all positions before today and will just wait through Cyber Monday next week. Happy trading!

Hi everyone, this weeks is World Cup week and Thanksgiving is on the way. Market is more or less sideways during this time till FOMC minutes later. So just take a rest and wait for more trendy days. USD reached 108 and making some correction. Watching for 106.80 level for the bounce if any. Happy trading.

Hi everyone, I'm back from my business trip. So, what did we have from the previous week? - USD bottomed at 105.30, slightly above our target of 103/104. Actually, it's too soon to say "bottom," but at least for a few weeks. USD could make a correction back to 109. I made an entry on the H4 chart around 106.50 during the trip and am still writing to the clients from my morning daily newsletter. However, I still consider this a correction from the daily chart, so I keep a cautious target on H4 entry and aim for exit 1/2 around 108.20, and the rest if it can reach 109.00/40 or move sideways, I would consider exiting and waiting for a closing above 109.50 before re-entering the trade. - For gold, I also had a view from the beginning of this week that gold would make a correction back to 1725 at first and observe this level. If things go bad, then wait until 1680/1700 before thinking about buying on the D chart. H4 is a different story. - For oil, time is running out as China does not support buyers at this time, despite all data pointing to a global recession. The first target was reached at 76.30 (right now) from the breakout entry (82.20), and the second target is 66.50 on the D chart, as described in my newsletter. - With BTC support at around 15800/16000, a true breakout from this level would provide a blood path to the 12,000 level. - All other pairs simply trade in opposition to the USD, at least for the time being, as the USD's drivers are strong. That's all for today. Happy trading!

Hi I am on business trip for few days and barely available during normal times so I would try to take notes when there are things that are different from previous notes. Cheers!

Hi everyone. It's Friday again, 1 week after last week, and I would like to requote from what I shared last week. Some of my swing trades last week, planned for a few weeks (short term), had quicker results than I thought due to high volatility during this week. The USD dropped to 109.40 and bounced up to 111 before opening a blood path to 106.70 for the time being. This short-term swing trade could end around 103/104 before bouncing back for a while. Then, if there were opportunities right after the swing down ended, I would take some bouncing-back trades. Another point to mention is that the long yen trade was perfectly timed, and the 135 level is possible for this swing. This implies that a 1,000-pip trade in USD/JPY is imminent. Gold also rose during the week to 1767 for the time being and will continue to challenge 1800 next week, but I prefer to exit before the weekend to wait for a shorter term correction rather than being greedy. The correction may start next week with 1723 before setting a goal of challenging 1800. Stocks are also on the rise, as I predicted with a longer-term perspective. The US500 index may test the 4100 level again in the coming week. In the case of stocks, the hard times are still ahead, but at least let the market be happy for now before the next financial reports in January. If we are so "academic," we cannot trade on this market. That's why I'm not an economist, but more of a strategist, setting things up before they even happen. We keep the status "up but keep an eye on it" because everyone else on the "street" does. It's all for the week. Happy weekend. By the way, don't touch crypto this time. Don't try to catch the bottom if you don't understand the nature of cryptocurrency, with all of its structured pools collapsing like dominoes when bad conditions arise. Just a sincere message.